By Dieter ZinnbauerSeries editor: Aled Williams

U4 Issue 2020:6

Urbanisation, informality,and corruptionDesigning policies for integrity in the

city

DisclaimerAll views in this text are the author(s)’, and may differ from the U4 partner agencies’policies.

Partner agenciesAustralian Government – Department for Foreign Affairs and Trade – DFATGerman Corporation for International Cooperation – GIZGerman Federal Ministry for Economic Cooperation and Development – BMZGlobal Affairs CanadaMinistry for Foreign Affairs of FinlandMinistry of Foreign Affairs of Denmark / Danish International DevelopmentAssistance – DanidaSwedish International Development Cooperation Agency – SidaSwiss Agency for Development and Cooperation – SDCThe Norwegian Agency for Development Cooperation – NoradUK Aid – Department for International Development

About U4U4 is a team of anti-corruption advisers working to share research and evidence tohelp international development actors get sustainable results. The work involvesdialogue, publications, online training, workshops, helpdesk, and innovation. U4 is apermanent centre at the Chr. Michelsen Institute (CMI) in Norway. CMI is a non-profit, multi-disciplinary research institute with social scientists specialising indevelopment studies.www.U4.noU4@cmi.no

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Keywordscities - urban governance - corruption - bribery - informal sector

Publication typeU4 Issue

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This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

The world is rapidly urbanising, and urban informality is a central feature ofour times. Conventional thinking views informality as corrosive to cleangovernment, but new scholarship illuminates the complex relations betweeninformality, power, and governance in cities. New technologies offeropportunities to disrupt entrenched power networks, tackle corruption, andease the precarious lives of city dwellers. We look at how anti-corruptionpolicies should be designed and implemented in urban settings marked byhigh levels of informality.

Main points• The world is urbanising rapidly, and informal economies dominate many

cities. Exposure to corruption is significant for urban dwellers living andworking informally, especially in the areas of livelihoods and housing.

• Corrupt practices in urban settings include, among others, co-optation ofcollective organisations of informal workers, dishonest schemes thatembed opportunities for rent seeking into urban infrastructure andservices, and forbearance as a mechanism to convert informality intoprivate political or economic gain.

• The popular remedy of formalisation to improve urban governancecomes with substantive qualifications and caveats.

• Smart-city technologies offer mixed anti-corruption prospects. Newplatform economies such as ride sharing could reduce exposure tocorruption in certain circumstances, but blockchain solutions for landmarkets are unlikely to make a mark. Remote sensing through dronesand satellites could be helpful when deployed by the right users.

• An updated understanding of corruption and urban informality suggestsways to rethink interventions. Rather than grand change projects thataim to shift a city’s corruption equilibrium, practitioners can pursueselective tactical interventions to enhance transparency and supportagency and voice among the marginalised. These may combine totrigger major advances in urban integrity.

Table of contents

Rethinking the informality-corruption nexus 1

An urbanising world 2

Urban informality data 2

Urban governance and informality: Major patterns and dynamics 5

Corruption and informality: What do we know? 7

A macro-level view of corruption and informality 7

Street-level experiences of corruption and informality 8

A meso-level perspective: Informality and systematic rentextraction

13

A systems view: Informality as pawn and weapon in urban policycapture

19

What to do and where next for city integrity? 22

Formalisation: Pathway to progress and integrity? 23

Technology to the rescue? 26

Drones and satellites: Sousveillance or surveillance? 28

From tipping points to entry points for interventions 30

Towards a rich tapestry of agency 32

References 35

a

About the author

Dieter Zinnbauer

Dr. Dieter Zinnbauer works on emerging policy issues and innovation in thearea of governance, technology, and urbanisation. He is based atCopenhagen Business School.

Rethinking the informality-corruptionnexus

How should anti-corruption policies be designed when the ways people live

and make a living in rapidly growing cities are often marked by high levels

of informality? What do we actually know about the relationship between

corruption and informality in cities? Is there a distinctively urban dimension

to this relationship, or can we just use insights from research on anti-

corruption and local governance more broadly?

Urban informality, affecting economies, individual livelihoods, and living

arrangements, is a central feature of our times. The world is rapidly

urbanising, with the fastest rates experienced in the Global South. High and

persistent levels of informality are a defining feature of these burgeoning

cities. But our understanding of the relationship between corruption and

informality is still evolving. Informality has long been seen as corrosive to

clean government, as it both drives and is driven by corruption. This

conventional wisdom is gradually giving way to a more nuanced

understanding of how governance and informality may be related.

Connecting insights from research on corruption, informality, and cities

offers a richer account of the urban informality-corruption nexus than any

single perspective can provide on its own. Meanwhile, emerging

technologies – often discussed under the labels of ‘smart cities’ and urban

digital empowerment – raise hopes for new ways to break open entrenched

power networks, tackle corruption, and ease the precarious lives of city

inhabitants.

This U4 Issue first lays out some of the principal features of urbanisation

and informality. It then examines the relationships between urban

informality and corruption, summarising a large body of empirical studies to

shed light on the complex and multifaceted nature of these relationships.

Next, it discusses how corruption might be reduced in settings of urban

informality. We explore some of the most popular and promising anti-

corruption approaches, from formalisation and technological approaches to

more incremental and tactical interventions. The conclusion calls for

moving beyond a narrow, formalistic view of curbing corruption in settings

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of urban informality and instead finding ways to encourage the agency that

often flares up in unexpected places and situations.

An urbanising world

The number of people living in cities worldwide has more than quintupled

since 1950, increasing from 751 million to 4.2 billion in 2018. Since about

2008, more people live in cities than in rural areas, and this rapid growth is

expected to continue. This will add another 2.5 billion urban dwellers by

2050, at which point the world’s population will be two-thirds urban.1

More than 90% of future urban population growth is projected to take place

in Asia and Africa. India, China, and Nigeria alone are expected to account

for 35% of this growth, adding more than 400 million, 250 million, and 180

million urban residents respectively over 30 years. Despite a popular focus

on megacities, much of this urban growth will be dispersed across

secondary and tertiary cities with fewer than 500,000 inhabitants. Such

cities already host half the world’s urban population.2

Serious governance challenges lie ahead. Sixteen of the 20 countries that

post the highest urban population growth rates in 2018 score in the bottom

half of Transparency International’s Corruption Perceptions Index (CPI),

pointing to high corruption risks in the public sector.3 Likewise, the top ten

most rapidly urbanising countries for which data are available have

extraordinarily high proportions of their urban workforce in informal

employment, from 63% in Mali to 88% in Nigeria and Angola.4

Urban informality data

Variations in measurement and definitions notwithstanding, there is broad

consensus that informal economies and informal housing are highly

prevalent, persistent, and on the rise in many cities around the world.

1. UN 2018b.

2. UN 2018b; Post 2018.

3. Author’s calculations based on data from World Development Indicators for 2018 and

Transparency International’s Corruptions Perception Index 2019.

4. Author’s calculations based on UN (2018) and ILO (2018).

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Informal economic activities in cities

An estimated 2 billion workers, more than 60% of the world’s employed

population, are in informal employment. On average, close to half of the

workforce in cities (43%) is informally employed.5 As well as providing

livelihoods, informal economic activity provides affordable and available

goods and services to large parts of the urban population in cities of the

Global South. For example:

• In Sub-Saharan Africa, 70% of urban households source food from

informal outlets, including street vendors.6 In Kampala, three-quarters of

the estimated 200 markets are believed not to be formally registered.7

• Informal, small-scale transport is the predominant means of getting

around many cities, accounting for more than half of all public transport

trips in Tehran and Cairo, more than 70% in Mexico City and Manila,

and more than 90% in Algiers and Dakar.8

• Access to piped water and formal water networks is not available to

more than two-thirds of poor urban households across Africa and Asia-

Pacific.9 Indeed, the proportion of the urban population with water piped

to premises and/or access to improved sanitation has declined in some

African countries over the past three decades.10 Frequently, small-scale

and informal water vendors pick up the slack.11

High levels of persistent informal economic activity have prompted many

observers, including those focused on formal governance institutions, to

accept informality as the ‘new normal’ in many cities. This has led them to

reappraise and explicitly acknowledge the functional value of informal

institutions in urban governance.12

Informal urban housing: Ubiquitous and on the rise

Formal housing supply is not keeping up with urban population growth, and

this is driving new informal settlements in many cities. Urban housing is

also embedded in land markets, which are overwhelmingly informal in

many developing countries. In West Africa, for example, only 10% of land

5. ILO 2018.

6. Roever and Skinner 2016.

7. Fichtmüller 2017.

8. Cervero and Golub 2007.

9. See World Health Organization (WHO) Global Health Observatory, Access to piped water.

10. Satterthwaite 2016.

11. Auriol and Blanc 2009.

12. Jütting and de Laiglesia 2009; World Bank 2017.

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is registered in some way, and only 2%–3% with official government

titles.13 In urban areas across Mexico, nearly 40% of owner-occupied

dwellings lack full deed.14 One in five residents of Rio de Janeiro live in a

favela, while a third of Guangzhou residents live in informal urban villages.

In Mumbai, an estimated 40% of people live in so-called slums.15 Across

Africa, the incidence of informal urban housing is higher still,

encompassing on average 60% of the urban population.16

These figures, however, mask a high degree of diversity across world

regions, countries, and cities in terms of what informal settlements look like.

In South America, buildings that lack proper title are often owner-built and

owner-occupied. In Sub-Saharan Africa, large shares of informal housing

are small-scale rental units owned by absentee landlords, while in China,

large-scale developments instigated by developers and local officials sprout

up in peri-urban areas but lack proper permits and titling.17 Informality in

urban housing is by no means confined to developing countries alone, as the

lack of affordable housing is reaching crisis point in some Northern and

Western cities too. In the United States, more than 2 million housing units

are estimated to be located in informal subdivisions.18

Globally, the share of the urban population living in slums declined by a few

percentage points between 2000 and 2014. But it is still very high in

absolute numbers and is increasing in several countries. More than one in

five urban residents are now slum dwellers. In 2014, more than 880 million

people across the world called urban slums their home, up from just over

800 million in 2000.19 This number is expected to double by 2030 and even

triple by 2050. Informal settlements are thus the predominant form of urban

housing in many developing countries. Not just a temporary stopgap for

new arrivals, they are increasingly a long-term reality across generations in

many places – more poverty trap than steppingstone, as one expert bluntly

puts it.20

13. Lall, Henderson, and Venables 2017.

14. Monkkonen 2016.

15. Ren 2018.

16. Lall, Henderson, and Venables 2017.

17. Ren 2018.

18. Durst 2019.

19. UN 2018a.

20. Buckley, Kallergis, and Satterthwaite 2018.

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Urban governance and informality: Major patternsand dynamics

At least four main structural features distinguish cities from rural areas: their

population scale, density, diversity, and rapid growth.21 These features

combine to create distinctively urban governance situations, corruption

risks, and informality dynamics. A brief overview is provided below.22

Cities still attract migrants, but recently urbanising places offer

fewer economic prospects

Urban scale and density offer economic agglomeration effects that turn

cities into beacons of opportunity. Survey-based estimates in China, for

example, suggest that migrants are willing to sacrifice 8% of their incomes

over five years for the privilege of becoming urban residents.23 Yet this

promise is wearing thin in the most recently urbanising places. In the highly

integrated global economy, geographic divisions of labour and competitive

advantage in manufacturing and low-skill production are already firmly

entrenched. This makes it difficult for newly industrialising countries and

their cities to follow the same economic development paths as their

forerunners.

As a consequence, in some of the most rapidly urbanising areas of the

world, particularly in Africa, urban economic investments, manufacturing

capabilities, and job opportunities are not growing in line with the influx of

new residents. This phenomenon has given rise to what are called

consumption rather than production cities.24 These new urban centres host

many poor people who have little prospect of moving quickly into formal,

well-paid employment, yet face high urban costs of living. This has

important consequences for urban inequality, political identities,

mobilisation dynamics, and the overall political economy of cities.

Urban politics is typically more competitive than rural politics

Cities are disproportionally governed by parties that are in opposition at

national level. Bigger constituencies enable a deeper bench of qualified

candidates for office and a higher number of informed voters.25 Density and

21. Wirth 1938; Post 2018.

22. For a more detailed account see Zinnbauer 2013.

23. Liu and Vortherms 2018.

24. Goodfellow 2018; Dodman et al. 2017.

25. Gerring et al. 2015; Majumdar, Mani, and Mukand 2004.

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spatial proximity make political organisation easier and encourage poorly

resourced opposition parties to concentrate their efforts in large cities. Cities

also tend to have sufficient socioeconomic scale and diversity to support

several competing clientelistic networks. As a result, they tend to offer more

political choices for residents and more intense political competition than

rural settings.26

Urban governance is complex and multi-level

Rapidly growing cities tend to outgrow their jurisdictional boundaries and

evolve into functional metropolitan areas that require coordination across

several local districts. The jurisdictional reach of city government covers,

for example, less than half of residents in Mexico City, Manila, or Jakarta.27

Coordinating vital urban functions involves dozens of local jurisdictions in

São Paulo and Mexico City and more than 100 in Abidjan.28 Similarly,

many urban services fall under the responsibility of national or state-level

actors or move back and forth between levels, requiring tedious

coordination. Political rivalries may further complicate the situation. In

Kampala, for example, responsibilities for specific policy areas have shifted

multiple times between city and national-level government entities in waves

of decentralisation and recentralisation that reflect a power struggle between

the two political camps that control the city and national governments.29

Taken together, these characteristics of urban centres influence the

relationships between informality and corruption in crucial ways.

Governance complexity and multiple public service problems are typical red

flags for corruption. Insufficient formal sector employment and insufficient

and/or unaffordable formal services provide the backdrop for high levels of

informality. At the same time, multi-level governance and intense political

competition in urban areas suggest that there are many potential entry points

for political agency and mobilisation.

26. Post 2018; Patterson and Caldeira 1983; Resnick 2014; Auerbach 2016; Auerbach and

Thachil 2018.

27. See LSE Cities research reported in The Guardian.

28. IPCC 2014.

29. Goodfellow 2018.

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Corruption and informality: What do weknow?

‘A terra não se vende, mas compra se – The land cannot be sold, but it can

be bought.’

– Mozambican saying30

How does corruption affect informal economies and livelihoods? How do

corruption and informality interact more broadly? The following sections

synthesise relevant empirical literature, sorting the evidence into four broad

segments:

• Macro-structural accounts that chart some principal relations between

informality and corruption, primarily based on regression analyses

• Empirics on ‘street-level’ corruption in informal urban settings and

people’s everyday experiences in cities when interacting with public

officials, services, and bureaucracies

• Empirics on urban corruption systems, the deeper rent-extraction

mechanisms that operate in urban settings

• Empirics on urban policy capture, the systematic bending of higher-level

decision-making processes and policies to illicitly favour special

interests

A macro-level view of corruption and informality

Various macro-structural analyses establish a clear positive correlation

between corruption and poor governance on the one hand and informality on

the other. These studies essentially support the conventional premise that

poor governance – from red tape to corruption – crowds out formal

economic activity and drives people into informality, and/or that a high

degree of informality fosters corruption and poor governance.31 Given

interpenetration between the formal and informal sectors,32 such general

30. Quoted in Fairbairn 2013.

31. Autio and Fu (2015), for example, find that formal economic entrepreneurship is

positively associated with good governance attributes in 18 countries in Asia-Pacific, while

Johnson et al. (1997) find a reinforcing dynamic between weak governance and informal

economic activity in transition countries.

32. Guha-Khasnobis, Kanbur, and Ostrom 2006.

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claims may be of limited explanatory value. But it is noteworthy that even at

this macro level of analysis, recent studies point to a complicated

relationship between corruption and informality.

Analysing Central and Eastern European countries, for instance, Williams33

finds that positive labour empowerment and social protection interventions

are more powerful explanatory factors for lower levels of informality than

the absence of red tape and corruption. Dreher and Schneider34 find that

corruption and informality are complements in low-income countries, but

not in high-income countries, where low informality goes hand in hand with

higher levels of corruption. This may be because low informality in richer

countries signifies high state capacity to prevent economic actors from

exiting from rules and regulation into informality, and thus governments

become a potentially lucrative target for corruption on the part of actors

seeking to evade and bend the rules. Dutta, Kar, and Roy35 identify a similar

dynamic in Indian states, where informality and corruption are found to be

complements in low-income states and substitutes in higher-income ones.

What’s more, the idea of a symbiotic relationship between informality and

corruption has been challenged. Bologna,36 for example, finds in her

comparison of more than 400 Brazilian cities that corruption depressed

economic performance in the informal sector, yet had only a statistically

insignificant effect on formal sector output.

Street-level experiences of corruption andinformality

‘Un político pobre es un pobre politico – A politician who is poor is a poor

politician.’

– Mexican politician and businessman Carlos Hank González

Conventional governance surveys rarely break out their data by experience

and perceptions to discuss the formal versus informal spheres of

governance. However, some local-level surveys and a growing number of

qualitative studies (using, for example, focus groups and participant

33. 2015.

34. 2010.

35. 2013.

36. 2016.

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observation) have begun to shed light on the relationships between

corruption and informality. The emerging empirical picture is rich and

defies easy classifications.

Micro-enterprises: High corruption risks, yet not so different from

the formal sector

A survey of micro-enterprises in Tanzania finds that the vast majority, 88%,

are paying bribes and that corruption is regarded as a significant problem.37

Firms exposed to bribery are more likely to be concerned about regulations

and the quality of utilities than their non-bribe-paying informal peers,

suggesting that these corruption risks are tied to interactions around public

services and regulations. A survey-based investigation into corruption

exposure of different types of metropolitan transport services in Lagos finds

a similar risk of bribery for more and less informal modes of transport. A

staggering 90% of transport providers reported having been asked for bribes

by the police in a three-month period, yet these rates are similar for taxis,

motorcycles, and tricycles, which exhibit varying degrees of informality.38

A comparative cross-city survey in seven major urban areas in West Africa

arrives at a somewhat lower, yet still significant estimate for the prevalence

of bribery. It puts the overall bribery rates among informal firms that had

contact with public institutions at 37% on average, reaching 40% in

Bamako, 45% in Abidjan, and 47% in Lomé. Again, transport was found to

be the sector most exposed to bribe payments.39

Informal livelihoods: Corruption as a daily challenge

People living and/or earning livelihoods informally have been widely

documented as being subject to persistent harassment, violent abuse, and

extortion, with female vendors often the primary victims.40 Two quotes

from focus group research point to the strikingly similar experiences of

street vendors on two continents:

‘The police and fiscais [government inspectors] arrive on motorcycles. They

kick us and throw our goods to the ground. Sometimes they take them,

unless we pay.’ – Street vendor in Luanda, 201341

37. Fjeldstad, Kolstad, and Nygaard 2006.

38. Adisa, Alabi, and Adejoh 2018.

39. Lavallée and Roubaud 2018.

40. Alfers et al. 2016.

41. Quoted in Human Rights Watch 2013.

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‘If you don’t pay what they [guards hired by the municipality] ask for,

sometimes they will even beat you, throw your merchandise on the street,

kick you, take your stuff away, and the municipality will not do anything.

They are on their side.’ – Street vendor in Lima, 201242

These statements are emblematic of other accounts collected through

ethnographic research on street vending. The quote from Lima is affirmed

by a different study, in which half the city’s officials reported it was

commonplace for street vendors to pay bribes to stave off enforcement

actions.43

Bribe payments take up a significant share of the already low incomes of

people who earn their living informally. A survey of 400 street vendors in

Mumbai paints what is probably the most detailed picture of bribery in

urban street vending. It suggests that two-thirds of street vendors pay on

average 15% to 20% of their daily income as bribes. These sums include

larger periodic payments to administrative authorities when eviction is

threatened and smaller, daily bribes to the police to fend off harassment.

Respondents also report an increase in harassment and bribe paying,

regarded as the principal reasons for stagnating net incomes in the vendor

segment. Female vendors are slightly less likely to report paying bribes, a

pattern the author attributes to the even lower social status and

impoverishment of female vendors, who often live in penury and thus

present a less attractive target for extorting bribes. The survey also teases

out strategies of resistance employed by the one-third of vendors who

claimed not to pay bribes. Some run away when the police or public

officials show up, while some of the older, experienced vendors simply

stand their ground.44

Most, though, have little choice but to pay up. Their dilemma is highlighted

by the tragic story of Tunisia’s Mohamed Bouazizi, the vendor whose death

helped spark the Arab Spring (see box).

42. Quoted in Alfers et al. 2016.

43. Holland 2015.

44. Saha 2011.

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Street vendors in Tunisia often operate in a legal grey zone and are

subject to permanent harassment by the police. On 17 December

2010, Mohamed Bouazizi, a young Tunisian vendor, was once again

asked to pay a bribe he could not afford and saw his scale and wares,

which he had purchased on credit, confiscated. He was so fed up with

this constant harassment and extortion that he set himself on fire and

died. The incident is widely believed to have helped spark the so-called

Arab Spring of upheavals and political transformations across the

Middle East and North Africa.

Informal housing: A different set of corruption risks

Exposure to street-level corruption in informal housing is more difficult to

assess, and there is less evidence available for several reasons. For one,

compared to informal livelihoods, informal housing is much less

comparable across countries and regions and thus less amenable to cross-

country surveys. As noted above, informal housing takes a variety of forms,

including owner-occupied homes, units rented by absentee landlords, and

large-scale commercial housing developments, among others. National and

local-level jurisdictions may apply and interconnect in different ways across

countries. Zoning and construction are typically administered locally, but

property rules are usually a national policy domain.45 Similarly, the

institutional backdrop of property systems varies, often combining elements

of customary and statutory law that create fragmented, incomplete, and at

times inconsistent systems. This means that stakeholders, their incentive

systems, and the most pertinent corruption risks differ across cities and

countries. Corruption analyses focusing on individual cities occasionally

include brief accounts of bribery in informal housing. Budhani et al.,46 for

Mohamed

Bouazizi

45. Monkkonen and Ronconi 2016.

46. 2010.

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example, describe how dwellers in informal settlements in Karachi must pay

off both officials and the police on a regular basis to avoid eviction.

There is ample research on how bribery and corruption shape the

institutional backdrop for formalising and maintaining formal property and

housing arrangements in a city.47 Property transfer, registration, and building

permitting have been found to be rife with bribery as well as red tape,

opacity, and bottlenecks conducive to bribery. These include:

• Bribery risks. Eight of the ten fastest urbanising countries for which

data are available have reported bribery rates in land registration above

20%. The rate is more than double this in Uganda, Senegal, Ghana,

Bangladesh, Tunisia, and India, and reaches a staggering 75% in

Pakistan.48 Similarly, in Asia-Pacific, 45% of senior managers in

construction businesses reported paying bribes to obtain corruption

permits, while in Latin America it was 11%.49 Data from anti-corruption

helplines operated by Transparency International further confirm these

findings. A majority of complaints were received from urban areas, and

corruption in relation to land issues was the main source of grievance.50

• Complex administrative procedures. Registering property takes six

procedures and around 60 days in Sub-Saharan Africa and Latin

America, and a staggering 111 days in South Asia. Obtaining a

construction permit requires 15 procedures and around 150 days

worldwide, reaching 190 days in South Asia and Latin America.51 In

Indonesian cities, land registration and permitting is reported to be more

expensive than the land itself.52

• Opacity. In 51 economies the only way to obtain information about the

documentation required for property registration is through in-person

contact with a public official. Only one-third of low-income countries

publish related fee schedules online. And only 10% of lower-middle-

income countries – and not a single low-income country – make

property ownership information freely available.53 Opacity is commonly

47. See below for a more systematic exploration of rent extraction schemes in informal urban

settlements.

48. Source: Author’s calculation based on data from Transparency International 2013 and

UN 2018b.

49. Monkkonen and Ronconi 2016.

50. Unpublished data come from an analysis of Transparency International’s Advocacy and

Legal Advice Centres in 14 countries, primarily located in Africa and the Asia-Pacific region.

51. World Bank 2018a.

52. Monkkonen 2013.

53. World Bank 2018a.

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believed to come with high risks of corruption and incentives for both

more and less legitimate claimants to resort to bribery to navigate

registration systems.

Street-level bribery to purchase, for example, protection from eviction is

only the tip of the iceberg, however. These transactions are rarely individual

opportunistic exchanges, where the power holder extracts extra payments

from a vulnerable person or the latter purchases administrative discretion.

Rather, many are embedded in and sustained by systemic rent-seeking and

corruption schemes involving many stakeholders and drawing on a broad

repertoire of corruption strategies beyond bribery alone.

A meso-level perspective: Informality andsystematic rent extraction

‘77% of survey respondents in African cities and 61% in Asian cities believe

public office holders benefit most from urban reforms due to corruption.’ –

UN Habitat54

‘Land scams become possible . . . because the bureaucracy is hand in glove

with politicians. Virtually everybody from top to bottom is on the gravy train

and works overtime to provide illegal gains to realtors, rather than acting

as custodians of public interest.’ – Investigative news article, Mumbai55

These observations are derived from a review of the literature on taxation of

the informal sector. Very little of the limited research into the bribery and

corruption experience of informal urban livelihoods seeks to root

observations in a deeper explanation of how these bribery exchanges come

about and how they are linked to broader political and social dynamics.

Neither surveys, interview-based corruption literature, nor deeper

ethnographic accounts in urban studies have offered, until recently, such

deeper analysis. This is changing, however, with a new crop of studies on

urban political economies and the meso-mechanics of corruption,56 which

54. 2010.

55. Quoted in Doshi and Ranganathan 2017.

56. This refers mainly to a body of ethnographic work on how corrupt exchanges are

organised in practice via brokerage and other strategies (see, for example, Jancsics 2015;

Baez-Camargo and Ledeneva 2017).

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draw on and update an established canon of work on patronage and

clientelism.

While a comprehensive picture of these dynamics is beyond the scope of

this paper, three broad themes stand out and will be discussed in the

following sections: (a) the co-optation of collective interest representation in

the informal sector; (b) corrupt rackets that create, expand, protect, and

embed opportunities for rent extraction into the infrastructure and service

landscape of cities; and (c) the role of forbearance as a cross-cutting but

overlooked mechanism to convert informality into private political or

economic gain.

Entrenched systems of rent extraction: Self-reinforcing and

expanding

‘You’ll never see the big guys … They are somewhere “up there.”’ –

Informant in the Kampala informal transport sector57

‘The biggest barrier is not land tenure, it’s not engineering, it’s not

financial, it’s not the feasibility of it and it’s not the willingness [of slum

dwellers] to pay … The biggest thing is the vested interest: either the local

cartels or simply the government of the day … With a concerted effort, you

can genuinely deal with [water supply to] Kibera within a year.’ – Water

expert in Kenya, referring to Kibera, the largest informal settlement in

Nairobi58

The co-optation of collective organisations of informal workers, to turn

them into vehicles for extracting economic rents and political resources,

already hints at mutual interests, transactional reciprocity, and opportunistic

alliances between economic and political actors. Yet such collusive

arrangements go beyond maximising exploitation based on the day-to-day

operations of informality. They are also geared towards actively producing,

reinforcing, and expanding the conditions that underpin informal markets

and informal livelihoods. These alliances are based not on temporarily

intersecting interests but on deeply interlocked and aligned interests. In

short, they manufacture and hardwire informality into urban infrastructures

and economies for sustainable rent extraction.

57. Quoted in Goodfellow 2016, p. 7

58. Quoted in Migiro and Mis 2014

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The political settlements perspective advanced by Khan59 has brought such

rent-extraction alliances into focus. The conceptual and empirical work

under this approach has greatly advanced our practical understanding of

how power is organised and interacts with informality in these

arrangements, albeit with an exclusive focus on the national or sectoral

level. Goodfellow60 has adapted the political settlements lens for the urban

context and demonstrated how it can be extremely useful for guiding and

interpreting research on urban rent-extraction systems.

More specifically, Goodfellow61 documents the contours of the deeper

relations that underpin the highly lucrative informal transport sector in

Kampala. As it turns out, it is common knowledge inside the sector,

although difficult to prove conclusively, that politicians at both city and

national levels get a cut of illicit payments. Moreover, they are believed to

be among the biggest owners of minibus fleets. They reportedly built up

their ownership stakes by asking businessmen who sought favours from

them to ‘buy ten or twenty matatus for them as a bribe … They all started

doing it, so now most owners happen to be politicians’.62 Owners often hide

behind strawmen who formally front these businesses. Similarly, accounts

of the informal urban transport sector in Nairobi hint at the likelihood that

the most lucrative routes are controlled by former police officers and gangs

with deep connections into law enforcement and government.63

Similar collusive rent-extraction systems have been identified in the urban

water sector. Far from simply extracting bribes from informal vendors who

fill critical gaps in public water provision, water ‘mafias’ – collusive

networks of political and economic power – actively influence public water

infrastructure and provision. They do so in ways that maximise and entrench

lucrative private business opportunities and the rents from informal

provision. In Jakarta and Mumbai, private water vendors and local officials

run elaborate kickback schemes and collude to limit public access to water

and maximise private profits, with a 50% markup over costs.64 In Nairobi,

similar scheming led to an estimated 80% markup of water prices for

underserved communities.65 Water infrastructure in the Mexican city of

59. 2010.

60. 2018.

61. 2018.

62. Key informant interview quoted in Goodfellow 2016, p. 7.

63. Chitere 2004; Klopp et al. 2014; Munene 2013.

64. Kooy 2014; Lovei and Whittington 1991; Graham, Desai, and McFarlane 2013.

65. Collignon and Vézina 2000.

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Neza was allowed to become dilapidated to enable officials to collect bribes

for repair work, while selective shut-downs were deployed as political

weapons.66 Similarly, in Lagos, service extension to underserved

neighbourhoods was sabotaged to protect private rent opportunities.67

Manufacturing scarcity and locking in informality is only one side of the

coin, however. Selective access and privileged availability is the other side.

Free water provision via mafia vendors in Bangalore68 and the placement of

community standpipes in Mumbai69 have been tactically aimed at securing

vote banks. In Mumbai, elites managed to retain, protect, and expand the

subsidised access they enjoy at the cost of expansion to underserved

neighbourhoods.70 Entrenched rent-extraction systems in the urban water

sector have also been able to withstand partial privatisation. In urban Ghana,

illegal connections to the water networks were enabled by corrupt

employees, and patronage networks inside the water bureaucracies ensured

that no disciplinary action was taken.71

Rent-extraction schemes are perhaps even more deeply rooted when it

comes to urban informal settlements. As it turns out, the on-the-surface

business of bribery for dealing with code violations or securing plots masks

much deeper structures aimed at extracting rents or pursuing political goals

in insecure tenure situations.

In Bogota, for example, a survey of housing officials found that two-thirds

believed government interference is a more serious obstacle to inclusive

housing than budget constraints.72, 73 In Kibera, the largest inner-city

informal settlement in Nairobi, it is estimated that more than 90% of

residents rent from absentee landlords who benefit from this highly

profitable venture to the tune of around $30 million in rental income

annually. More than half of these landlords are believed to be government

officials or politicians.74 Informal housing markets are also identified as

66. Herrera 2014.

67. Gandy 2006.

68. Ranganathan 2014.

69. Cooper 2011.

70. Graham, Desai, and McFarlane 2013.

71. Hirvi and Whitfield 2015.

72. Holland 2016.

73. It should be noted, however, that the motivations in this context might not necessarily be

corrupt, but could also be welfare-oriented.

74. Fox 2014; Gulyani and Talukdar 2008.

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important sources of rents for government officials from Karachi to Dar es

Salaam.75

The agency of inaction: Forbearance as a cross-cutting mechanism

Things that are not done or do not happen are easily overlooked in analysis,

since they lead into the epistemologically difficult terrain of hypotheticals

and counterfactuals. And when inaction is noted explicitly in studies, it is

often explained as the result of a lack of knowledge or capacity for acting.

This is often the case with regard to forms of informality, such as informal

housing schemes or untaxed economic activity, the persistence of which is

often intuitively attributed to a lack of enforcement capacity.

On closer inspection, however, there is another important driver of inaction

that might be relevant in urban informality: deliberate, calculated

forbearance as a tool for a variety of both legitimate and corrupt aims and

objectives. Holland76 defines forbearance as the ‘intentional and revocable

nonenforcement of law.’ The idea that calculated forbearance matters is an

old one, going back at least to Scott77 and his groundbreaking work on urban

machines. Scott posits that politics in weaker governance settings mostly

plays out in the enforcement and implementation stage, rather than in the

policymaking stage. As he put it, ‘A large portion of individual demands,

and even group demands, in developing nations reach the political system,

not before laws are passed, but rather at the enforcement stage’.78 This has

also been a longstanding tenet in the area of taxation, reflected in the

observation that ‘tax administration is tax policy’.79 The idea of wilful

inaction features everywhere in the grey policy literature on governance,

where ‘lack of political will’ is a popular yet deeply unsatisfying shorthand

to explain many significant enforcement gaps.

Deliberate forbearance is a common theme in recent analyses of urban

informalities and urban political economies. Holland80 has begun to

systematically unpack its drivers, forms, and consequences. Conceptually,

she shows how forbearance may be a vehicle for conventional corruption or

plutocratic policies (when regressive in impact, and depending on whether

75. Beall, Fox, and Gazdar 2010.

76. 2016.

77. 1969.

78. Scott 1969, p. 1142.

79. Casanegra de Jantscher 1990.

80. 2016.

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or not it is contingent), or, alternatively, may serve a clientelistic or welfarist

purpose (when progressive in impact, and again depending on whetherit is

contingent or not). Either way, forbearance, more than any other policy

choice, is directly linked to producing and sustaining informality. It is an

elegant, elastic, and effective political instrument. As non-action it does not

run into resource constraints or capacity problems, nor does it require the

assembly of political coalitions. It can be revoked with relative ease and

thus has a credible-threat potential that produces and sustains exploitable

uncertainty, vulnerability, and ultimately dependency on the part of

beneficiaries. It can be dispensed with impunity and plausible deniability,

easily excused as a result of resource or information problems. It is thus

hard to identify and sanction as an act of corrupt quid pro quo.

With these features, calculated forbearance might be the most important

strategy in the politics and rent-extraction dynamics of informal urban

settlements and livelihoods. It certainly surfaces in many empirical

accounts. Holland81 documents how elected officials in Santiago

systematically reduced crackdowns on street vending in poorer districts

prior to elections. And she traces how forbearance plays a major role in the

low enforcement rates, well below 1%, for evictions in Lima and Bogota.

The lens of forbearance also helps explain the lack of political will with

respect to property system reforms: politicians in many settings prefer

insecure tenure arrangements over more secure property rights, as insecurity

allows them to retain the option of forbearance in their political toolbox.82

For Turkey, the non-eviction of urban squatters is described as the primary

means to secure urban votes.83 More low-income urban residents have

acquired their homes through illegal settlements and illegal sale than

through official social housing programmes. The implicit subsidy in terms

of savings on rent is estimated to be three times the total of the combined

value of all social programmes for this group.84

In Zambia, deliberate non-enforcement of laws against street vending was

identified as an important part of the opposition platform in the 2011

elections and helped bring about a change in government.85 Calculated

81. 2016.

82. Boone 2009; Onoma 2009; Collier 1976.

83. Buğra and Keyder 2006.

84. Baslevent and Dayoglu 2005.

85. Resnick 2013.

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forbearance has also been empirically linked to the election cycle in the

Indian state of Uttar Pradesh between 2000 and 2009, where illegal tapping

of electricity was allowed to increase by a significant 3 percentage points in

the run-up to elections as a political move to sway voters.86

A systems view: Informality as pawn and weapon inurban policy capture

‘The Law, in its majestic equality, forbids, the rich, as well as the poor, to

sleep under the bridges, to beg in the streets, and to steal bread.’ – Anatole

France, The Red Lily87

Policy capture is not about flouting and exploiting the rules of the game

(street-level corruption), or about systematically organising and maximising

this type of rent seeking (meso-level corruption). Rather, it involves

institutionalising undue influence on the rules themselves and, even more

fundamentally, on the process of defining the rules.88

Some aspects of policy and government capture are well researched and

well understood: for example, the financing of political campaigns and how

it creates deep dependencies that structure policymaking in favour of special

interests. The classic framework for thinking about policy capture in the

urban realm is the notion of urban machines. Vote buying and patronage as

strategies to entrench political control have proven particularly effective in

fast-growing cities that experience a large influx of new residents. An

emergent body of analysis in urban political studies has begun to revise this

account in the context of contemporary urbanisation.89 These new insights

go beyond the scope of this paper, but it is relevant here to focus on a

dimension of policy capture that is less researched and bears a direct link to

urban informality.

Informality as elite rhetoric and practice for policy capture

Central to this dimension of policy capture is the work on informality by

Roy,90 who posits that ‘informality exists at the very heart of the state and is

86. Min and Golden 2014.

87. 1894.

88. Carpenter and Moss 2013.

89. E.g., Post 2018; Auerbach 2016.

90. 2009.

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an integral part of the territorial practices of state power.’ This echoes

longstanding claims by scholars of political settlements, who view informal

institutions as tools that the powerful can use to align formal institutions

with their rent-seeking interests.91 It underpins the analysis by dependency

theorists on the role of informal labour as the main engine of capitalist

expansion and exploitation.92 Yet Roy and colleagues expand on this view

and apply it to the context of cities and urban development, and in so doing

they direct attention to different types of informality. Divorcing informality

from its association with the weak, small, poor, marginalised, and

disorderly, they advance the notion of elite informality that shines a

spotlight on the many informal development practices undertaken by the

rich and powerful. Roy enlists urban expansion in Kolkata as an illustrative

example. As she notes, ‘Elite informality is often legitimized … Thus, the

new towns on the peri-urban edge of Kolkata exist in direct violation of the

state’s own proclaimed policies of protecting agricultural land and wetlands

… But rarely are they seen to be informal or illegal’.93

This reframing of the narrative is what makes this strand of critical urban

scholarship so refreshing. One can test this on oneself: when one hears the

term ‘urban informality,’ doesn’t it call up the image of an urban slum,

rather than of a gleaming shopping mall erected on environmentally

protected land? Once one accepts the concept of elite informality, examples

are easy to come by. They include the blatantly illicit violations of building

and zoning regulations by senior government officials in Hong Kong for

their own homes; illegal golf courses or systematic violations of building

codes by developers connected to senior government levels in China; and

the headquarters of the most influential industry association in Bangladesh,

allegedly built on illegally obtained land without proper approval in an

ecologically sensitive zone in Dhaka.94 Such projects continue to defy

legislation and present a physical manifestation of impunity.

More often, however, elite informality manifests as projects that

strategically exploit legal loopholes with the help of inside experts.95 They

may start out as illegal developments but are later regularised rather than

kept in convenient legal limbo like their counterparts in slums. Case studies

91. Khan 2010.

92. Potts 2008.

93. Roy 2011.

94. Bland 2018; Ng 2018; Sun 2015; Yardley 2013; Dhaka Tribune 2018.

95. Hudalah, Winarso, and Woltjer 2016.

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attest to a multitude of such projects, ranging from palatial mansions in

Delhi to corporate offices and luxury developments across cities in India,

Bangladesh, Mexico, and Pakistan.96 Rules and regulations are often

changed prior to the construction of lucrative developments in order to give

them a veneer of legality and steer business opportunities or windfall profits

from land ownership to connected developers. This happened, for example,

in Queensland, Australia, where politically connected developers benefited

disproportionately from rezoning changes, pocketing more than AUS 400

million over a five-year period alone.97

Kigali provides perhaps one of the most vivid examples of this type of

entitled urbanism, where elite informalities are made possible by adapting

rules rather than flouting them. For while bribery rates in the property

registration sector overall are described as extremely low and affect only 4%

of people interacting with the system,98 Kigali has changed its zoning laws

several times, back and forth – an indicator that the laws have been

manipulated to accommodate the many high-value real estate and urban

development projects in the city.99 As in other cities, the widespread and

unchallenged opacity of ownership and transactions in high-end real estate

and urban land makes these assets prime vehicles for laundering money and

investing ill-gotten gains.100

Critical urbanists have used insights on elite informalities and the biased use

of the informality narrative to turn the discursive table: they have coined a

new concept of informality as the negotiability of value. This fresh

perspective provides a much more even-handed vantage point from which to

examine informalities. It highlights the essentially political nature of the

concept and thus makes salient the delegitimising connotations that bias the

approach to conventional, street-level informality. At the same time, it

exposes elite informality and stealth formalisation for what they are: subtle

forms of policy capture that deserve to be subjected to political challenge.

Finally, given the many ways in which the formal and informal are

entangled, it might be most productive to understand this interplay as a sort

of bricolage, made up of at times messy interfolding bits and pieces across

96. Soni 2000; Doshi and Ranganathan 2018; Moatasim 2019.

97. Murray and Frijters 2015.

98. Transparency International 2013.

99. Goodfellow 2017.

100. Transparency International UK 2015.

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various planes, partly deliberately construed, partly occasioned by emerging

practices.101

What to do and where next for cityintegrity?

What does the analytical landscape on informality, corruption, and

urbanisation tell us about possible anti-corruption strategies?

First and foremost, it cautions against silver bullets. The diversity and

contingency of practices and actors at the nexus of informality, corruption,

and urbanisation frustrates the quest for blanket policy solutions. Yet the

same complexity and contingency also affects corruption schemes and the

grip on power by the corrupt, which is never complete and immutable.

These insights can in turn inspire locally grounded struggles for incremental

and transformative changes, because they dispel both the overwhelming

quest for an all-encompassing solution and the paralysing sense that nothing

can be done. As Pieterse102 puts it: let’s pursue ‘radical incrementalism’, so

that ordinary practices become a template for social change and people’s

empowerment.

A comprehensive inventory of all policy measures that might have an

impact on urban informality and corruption is impossible. They range from

initiatives anchored in right-to-the-city, urban justice, or general human

rights principles all the way to technology-centred ‘smart-city’ or ‘smart-

citizen’ initiatives. Relevant interventions may take place far outside the

immediate urban realm. For example, changes to how parties select

candidates or how taxes are raised and shared between local and national

levels might fundamentally change the dynamics at play in an urban

context. Such measures are outside the scope of this analysis. Instead, the

following sections briefly revisit two of the main types of direct

interventions that have been most prominent in recent years – efforts around

formalisation and the strategic use of technology – and then move on to

suggest some worthwhile areas for applying the interventionist needles of

urban acupuncture.

101. The term bricolage in institutional thinking is rooted in the work of Lévi-Strauss (1962)

and Douglas (1973) and has been most prominently adopted in accounts of informality by

Cleaver (2002) and Cleaver et al. (2013).

102. 2013.

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Formalisation: Pathway to progress and integrity?

Perhaps the most common recipe for dealing with the negatives typically

associated with informality is formalisation. At times this is couched in

draconian terms, with suggestions to eradicate informality by cleansing city

streets of unlicensed vendors, evicting squatters, and undertaking

surveillance, surveying, monitoring, and mapping to make the structures of

informality legible and sanctionable. At other times formalisation is

presented in enabling terms as measures that can cut red tape, enhance

access to registration services, and provide incentives to use them.

Formalising land and housing

In terms of formalising informal housing arrangements, most influential is

probably still the work by de Soto103 and others following in his footsteps.

According to this view, formalisation of land and property ownership is an

essential way not only to help poor households gain tenure security and

protect against corrupt extortion, but also to equip them with an economic

asset that opens access to credit and housing markets and unleashes their

entrepreneurial energy.

Yet evidence on what formalisation can and cannot achieve and on how this

links back to dynamics of corruption is scarce, and frequently diverges from

this intuitive narrative. While an analysis of Mexico’s titling programmes

finds a reduction of local clientelism,104 research on Chinese housing

markets concludes that formalisation efforts around peri-urban land are not

expanded due to fears of undermining social stability and accelerating

illegal encroachment of developments into environmentally sensitive

areas.105 Research on the value of deeds in Mexican cities also suggests that

formalisation is barely effective in reducing poverty. It is found to benefit

primarily communities that are highly educated and politically efficacious

and who enjoy a ‘culture of formality,’ while the value of informal property

by the poor is much more influenced by structural and material attributes

than by complete formal ownership rights.106

More generally, it is feared that an approach based on formalisation of

individual ownership may be too narrow and rigid in the many contexts

103. 2000.

104. Larreguy, Marshall, and Trucco 2015.

105. Zhang and Zao 2018.

106. Monkkonen 2016.

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where urban property ownership structures are complex – shaped by a

mosaic of customary and statutory law, individual and common ownership,

inconsistent and incomplete record keeping, and so on. Nor can such an

approach easily accommodate the layers of pragmatic arrangements that

often structure and coordinate a web of different uses, functions, and

relations attached to urban land and property. Land experts therefore

increasingly embrace the more elastic notion of a social continuum of

ownership and use that covers a wider range of possible arrangements as a

means to understand and improve urban housing. They also argue for the

recognition of hybrid land and property holding arrangements where these

structures can be leveraged pragmatically to yield socially beneficial

outcomes.107 This suggests that practitioners should undertake a careful

assessment of extant informal and formal arrangements in devising suitable

trajectories for urban reform, while paying close attention to how abuses of

power can interfere and be contained along the way.

Formalising economic activity

A common premise about the relationship between corruption and

informality in the economic sphere is that formalisation is an effective

strategy to protect against corruption and predatory state behaviour. These

hopes are encapsulated in a remark by a street vendor in Mumbai, who said,

‘We would like to pay the amount as taxes instead of bribes for our …

space. We would even love to pay double the amount that we are paying

now’.108

The evidence on whether formalising economic activity reduces corruption

is mixed and inconclusive, however. On the positive side, taxing informal

enterprises has been found to lead to more bargaining power for micro-

enterprises in Ghana,109 more public engagement in Ethiopia,110 and more

trust by these firms in the state in Sri Lanka111 – all traits that could be seen

to pave the way for more accountability and less extortion. Yet there are also

reasons to believe that such benefits are not spread equitably. In Indonesia,

for example, they are found to accrue mainly to mid-size but not small

firms.112 Accounts of street vending in La Paz in the 1980s and 1990s also

107. Lall, Henderson, and Venables 2017.

108. Saha 2011.

109. Joshi and Ayee 2008.

110. Prichard 2010.

111. De Mel, McKenzie, and Woodruff 2012.

112. McCulloch, Schulze, and Voss 2010.

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show that tax and bribe payments were closely tied together. The official

daily payment for use of public space had to be topped up with an unofficial

payment to the police.113 Similar tax/bribery schemes are also reported in

Mumbai.114

These findings suggest that corrupt bureaucrats prey on informal and formal

economic actors alike. In line with this premise, newly registered firms in

Kenya have been found to still be subject to harassment by public

officials.115 And in Lima only 25% of firms in a field experiment were

prepared to formalise, even with registration costs largely waived, due to

limited expected benefits and low trust that the government would uphold

its part of the bargain.116

Other accounts suggest that selective inclusion or exclusion, enforcement or

forbearance, are at times deployed as corrupt tactics in themselves, resulting

in greater exposure to corruption and marginalisation for the least powerful

economic agents engaged in formalisation.117 An ethnographic study of

street vendors in Paraguay, for example, finds that formal recognition

creates the conditions for a lack of recognition in the first place. Street

vendors are deemed legitimate when they pay formal fees. However, they

are rendered immediately and explicitly illegal when these payments are

rejected, as is often unexpectedly the case. This turns formalisation and its

sudden reversal into a tool of ‘regulation by ambiguity’ or ‘dispossession by

formalization,’ as Tucker118 calls it.

Against this backdrop it is not surprising that a survey of street vendors in

Lima found that only 20% of registered vendors believed that such

formalisation brings the advantage of not having to pay bribes.119 Similarly,

the degree of formality in terms of collective organising within this sector

did not influence exposure to corruption. In São Paulo, both organised and

unorganised street vendors reported to being subject to a bribery racket by

officials who used the threat of confiscation to extract bribes.120 In La Paz,

113. Hummel 2018.

114. Anjaria 2011.

115. Joshi, Prichard, and Heady 2014; Kamunyori 2007.

116. Jaramillo 2009.

117. For related dynamics in conflict-afflicted contexts, see Schomerus and Titeca (2012) and

Titeca and Kimanuka (2012).

118. 2017.

119. Jaramillo 2009.

120. Itikawa 2010, referenced in Hummel 2017.

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street vendors indicated that they were paying smaller, more frequent bribes

before organising, but larger, less frequent bribes after organising, with

overall amounts remaining the same.121

All this suggests that, as with informal housing, sensible formalisation

strategies for economic activities are highly context-specific and would

most productively consider a differentiated set of activities that help reduce

registration costs, expand legal protections and entitlements for the most

marginalised participants, and support inclusive and accountable collective

organisation of informal actors. In addition, support for segments of the

formal sector that can help expand employment and economic choices for

the informally employed can also be a viable strategy.122

In sum, there are three main take-aways about the role of formalisation in

addressing the pernicious impact of corruption. First, a narrow focus on

formalisation is ill-attuned to the complex bricolage of the formal and

informal in urban settings. Second, the design and success of differentiated

formalisation strategies are context-specific, and benefits might primarily

accrue to wealthier households and larger firms. Third, reducing exposure to

and harm from corruption is not an automatic benefit of successful

formalisation. Corruption exposure might go unaffected or even increase,

and the modalities of corrupt rent extraction are likely to morph to adapt to

the new situation. As a result, practitioners devising a sensible strategy to

tackle the abuse of entrusted power need to carefully consider how such

abuse manifests itself in a given context. They also need to consider how

power abusers will seek to reassert practices of illicit rent extraction in any

reconstituted mix of formal and informal institutional arrangements.

Technology to the rescue?

Can new technologies change the urban informality and corruption nexus

for the better? A thorough discussion of this question goes beyond the scope

of this paper, but it may be helpful to briefly consider three core urban

technologies that directly relate to hotspots of urban informality and

corruption.

121. Hummel 2017.

122. Potts 2008.

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Platform powers: Disrupting urban transport mafias?

In the Global North, platforms for ride hailing and flat sharing, to name just

two examples, give what used to be informal social practices, or fringe

businesses, a transformative reach, scale, and corporate model. Often

branding themselves as technology providers rather than service operators,

they follow business models that largely sidestep applicable regulations and

worker protections in their markets, thus leading to what could be called a

partial, temporary informalisation of the urban transport or hosting sector.123

In the Global South, however, where transport is characterised by a high

degree of informality, these services might contribute to a partial

formalisation of service provision, at least for the richer segments of the

population who are the main users of platform-based services. Given a

string of high-profile security and safety incidents, these businesses have

begun to firm up their internal governance, putting in placer stricter vetting

mechanisms for drivers and hosts, making pricing more transparent, and

including client feedback in regulating service providers.

It is difficult to gauge the implications of these recent trends in terms of the

potential for, or impact on, corruption. In the Global North, the financial

muscle of globally dominant businesses, coupled with their demonstrated

readiness to mobilise large numbers of customers along political lines,124

raises concerns about disproportionate influence when it comes to shaping

transport policies in the public interest. In the Global South, some emerging

practices could further formalise informal transport, notably taxation and

vetting of drivers and offering them semi-formal recognition and enhanced

economic security. This is currently being done for ride-hailing drivers in

Bangalore, India, and for minibuses in Kampala on an experimental basis.125

But it remains to be seen how such initiatives develop amid the multiple

vested interests and political and economic powers that collude to control

informal transport in many cities.

Blockchain: A game changer for land management?

A distributed ledger is a database that is shared and synchronised across

multiple sites, institutions, or geographies.126 Underlying distributed ledger

technology, in many cases, is the blockchain, a cryptograhically supported

architecture to protect against manipulative interventions. The terms

123. Ferreri and Sanyal 2018.

124. Culpepper and Thelen 2018.

125. Surie and Koduganti 2016; Evans, O'Brien, and Ch Ng 2018.

126. Majaski 2019.

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blockchain and distributed ledger are often used synonymously. At first

glance, the technology’s promise of radical disintermediation, sophisticated

authentication, and tamper-proof document management appears to be ideal

for improving urban land and property registries that are plagued by

widespread fraud. But it is far from clear whether the use of distributed

ledger technologies will have a transformational impact in this regard.

Building blockchains on top of what are often inconsistent and incomplete

registries could codify existing inequalities and manipulations. And it could

even further amplify these baked-in inequalities, if – as many formalisation

experiences have demonstrated – it is primarily wealthier and

knowledgeable citizens who avail themselves of such technology-enabled

registration opportunities. Similarly, it is highly likely that the blockchain

will follow the template of so many other technologies that have promised

radical disintermediation but have then evolved into services that are

administered through several layers of intermediaries, given that most users

are neither able nor willing to operate such systems by themselves. This re-

intermediation opens the door again to manipulative interventions and

corruption by gatekeepers.

Finally, and most likely, the organisational requirements for data integration

and migration that come with launching fully-fledged blockchains for land

registries will be prohibitive in weak governance contexts. This suggests

that more conventional e-government reforms that seek to digitise some

aspects of land management – and have produced significant enhancements

in service access and processing – might be a better bet.127

Drones and satellites: Sousveillance or surveillance?

Advanced satellite and aerial imaging technologies may get less attention

than blockchain technology or platform companies, yet they might turn out

to be the most helpful in advancing an inclusive urban integrity agenda.

Satellite image analysis is becoming cheaper, more widely accessible, and

more granular.128 Satellite-based remote sensing is ideally suited for

mapping urban growth, expansion, and development patterns,129 and it can

provide evidence for systematic, as well as individual, infringements of

127. World Bank 2018b.

128. Donaldson and Storeygard 2016.

129. Glaeser et al. 2018.

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zoning and environmental regulations or unequal distribution of public

infrastructure. Drones are also increasingly used for urban planning

purposes. In the hands of activists, they can provide targeted analytical

evidence and vivid images of specific claims about illicit luxury property

developments behind thick walls or about environmental spills and hazards.

Most importantly, both technologies can be used by multiple stakeholders.

Drones can, for example, be launched by non-governmental organisations,

and satellite data can be procured and analysed by research collectives both

inside and outside a country. This means that satellites and drones can help

generate an alternative evidence base where official data are not publicly

available or are subject to question. This can combat the opacity that fosters

impunity and establish a new baseline of transparency for urban

development and corruption issues.

Publicly exposing hard-to-map infrastructural inequality, such as skewed

roll-outs of public infrastructure to politically connected districts, is

insufficient to remedy these situations. But making such patterns visible can

be a useful, at times necessary, step towards creating pressure for change.

Satellite imaging has already helped map politically motivated power

outages in Ghana,130 ethnic patronage in slum upgrading in Nairobi,131 and

local pollution hotspots tied to political connections in China.132 It has been

instrumental in identifying building code violations in US cities133 and

property tax evaders from Italy to Greece.134 In Arusha, Tanzania, imaging

has helped identify five times more buildings for taxation, resulting in a

75% increase in related tax collection.135 It has been found sufficiently

cheap and granular to increase property tax collection in Kigali by a factor

of 10.136

There are clear prospects for further rapid advances in these technologies

and their increased uptake in civil society work and research. Satellite and

drone data combined with other data sources and collection exercises, such

as GPS-based tracking of transport routes,137 can be expected to advance the

130. Min 2019.

131. Marx, Stoker, and Suri 2019.

132. Jia 2017.

133. Nichols 2010.

134. Casaburi and Troiano 2015.

135. Lall, Henderson, and Venables 2017.

136. Ali, Deininger, and Wild 2018.

137. Williams et al. 2015.

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urban integrity agenda. Such data collection offers opportunities to

problematise and visualise the types of elite informality currently

characterised by impunity and to validate government performance on

infrastructure and public goods provision.

At the same time, some caution is in order. Political connections can still

trump satellite-supported transparency. In China, for example, regulators

hunt down building violations with powerful satellite monitoring

capabilities, yet the best-connected developers continue to build golf

courses in glaring violation of zoning rules.138 Moreover, the rapid creation

of facts on the ground, in the form of sprawling developments preceded by

illicit land grabs, might outpace regulatory enforcement even when

sophisticated satellite monitoring is deployed. This has been observed in

Turkish cities.139 Perhaps most importantly, these intrusive technologies

raise serious concerns about privacy-infringing uses. In the hands of corrupt

governments or businesses, they offer novel opportunities to make

grassroots informalities, from street vending to squatting, more legible,

sanctionable, and exploitable for political and economic gain. More

surveillance by the powerful will likely be a major feature of our urban

future in both the Global North and South. Yet, more sousveillance – the

distributed monitoring of entrusted power holders – also offers distinctive

opportunities in cities around the world.140

From tipping points to entry points forinterventions

Conventional theories of change underpinning many anti-corruption

interventions hold that some societies are stuck in a high-corruption

equilibrium. They suggest that what is needed is a big-push effort to reverse

this dynamic and move the society beyond a ‘tipping point’ to achieve a

low-corruption equilibrium. But another, increasingly influential strand of

thinking in urbanism downplays the notion of equilibria and grand change

projects. Instead, it construes the city as an organism whose dynamics are

always adapting to changing circumstances, yet can be strategically

influenced through a sort of urban acupuncture: small interventions that

138. Sun 2015.

139. Bozçağa and Holland 2018.

140. Mann and Ferenbok 2013.

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30

might trigger second- and third-order effects and so bring about

transformational shifts.141

These two perspectives are not mutually exclusive, but thinking about

acupuncture adds a useful complementary perspective on urban integrity

building. It provides a more contextual and granular understanding of urban

settings and an appreciation of tailored micro-interventions that can ripple

outward and set in motion bigger change. This notion dovetails well with

some of the nuanced empirical findings presented earlier. Social identities

and political loyalties are more fluid and malleable than a cursory analysis

might suggest. At macro-structural level, the complexity of urban political

and economic systems makes them prone to fluctuations, shifts, bifurcated

trajectories, and dynamic reversals.

What does this mean in terms of worthwhile micro-interventions that could

help improve urban integrity? Identifying effective interventions is

necessarily context-specific, requiring a full understanding of political,

economic, and spatial dynamics in a particular locale. One promising type

of micro-interventions that could potentially pave the way for new dynamics

in urban power configurations relates to targeted transparency measures.

Selective transparency interventions: Budgets, contracts, interests,

ownership

There are several blind spots in municipal transparency that, if filled, could

help shine a stronger light on the conflicts of interests, dependencies, and

ultimate beneficiaries of urban policies and resource flows. This ‘magic

triangle’ of urban transparency would consist of accessible and timely

public disclosure of information on:

• beneficial ownership of companies active in the local economy, and

beneficial ownership of land and property holdings;

• municipal budgets and major contracts;

• the assets, incomes, and interests of senior civil servants and

policymakers.

Actively enforced, these transparency measures would provide an essential

step in understanding who benefits from urban policies and municipal

spending. They would allow us to start identifying and tracking the interests

141. Lerner 2014.

U 4 I S S U E 2 0 2 0 : 6

31

that benefit from public contracts, specific infrastructure roll-outs, or urban

development policies. Achieving meaningful transparency on all three fronts

is a Herculean task. Yet, for all three pillars, reporting frameworks and

disclosure templates are in place, and related norms, standards, and public

expectations are becoming more demanding. There is a growing community

of civil society organisations working on these issues, although so far

mostly at national level.142 Even partial, poorly enforced implementation can

make a difference. There are already documented cases in which such

measures have revealed cronyism in the allocation of contracts or the hidden

stakes that politicians have in specific policy decisions.143

Towards a rich tapestry of agency

As the empirical literature reviewed above suggests, making sense of the

relationships between governance, urbanisation, and informality is best

approached as a multi-disciplinary project. Scholarly research on urban

informalities can accelerate critical introspection and evolution in anti-

corruption thinking and action. Such research invites us to examine on a

case-by-case basis the functional purpose of informality, its significance,

and its relative legitimacy in the context of broader frameworks of economic

and political governance. Such insights have begun to spill over into the

governance research and policy community. The World Bank, for example,

now urges a move from thinking primarily about the ‘rule of law’ to also

focusing on the ‘role of law’.

Researchers and policymakers are developing a richer set of diagnostic

instruments, institutional design options, and policy interventions intended

to help discipline and democratise power. Deployed pragmatically yet

creatively in service of a social justice agenda, these tools can help direct

urban integrity policy interventions towards promising avenues for reform.

142. On beneficial ownership transparency more broadly, see the website of the civil society

coalition Open Ownership. On transparent property ownership, see, for example, cases in

the UK (Pegg 2018) and Germany (Transparency International Germany 2018). An example

of diagnostic work on subnational budget transparency is the International Budget

Partnership’s Subnational Open Budget Survey. On transparency in open contracts,

including case studies at city level, see the website of the Open Contracting Partnership. For

a summary of initiatives and resources for asset, income, and interest disclosure, see

Transparency International (2015).

143. See, for example, the case of US politician Sheldon Silver, in which filed income

declarations critically informed investigations (New York Times 2015). In Iceland,

incomplete asset declarations led to the resignation of a prime minister (Guardian 2016).

U 4 I S S U E 2 0 2 0 : 6

32

The political settlements approach applied to cities provides a good starting

point for sharpening the analytical focus on power. It is important to not

give in to what Tucker144 describes as ‘a tendency to reify power as an

unassailable capacity held by a small number of conspiratorial actors.’ At

the same time, great care is needed to ensure that new institutional reforms

do not simply reproduce existing power relationships. Indeed, ‘If both

designing new institutions and working with the grain of socially embedded

institutions serves to reproduce inequalities of power, then what are the

possibilities of fashioning more socially just and effective’ forms of

governance?145

As the large body of work on urban issues makes clear, agency is possible

and arises in many, at times unexpected, places. Urban ethnographers find

instances of agency against all odds in even the most marginalised and

informal urban situations. These include what Lindell146 describes as

‘strategies of invisibility,’ ‘tactics of avoidance,’ and ‘everyday social

practices [that] are deliberately masked, dissimulated and made opaque’ in

ways that render them invisible and hard to exploit by corrupt bureaucrats or

businesspeople. Other observers have noted the ‘myriad daily practices of

resistance, characterised by small-scale individual actions,’ ‘not a politics of

protest, but of redress’,147 and the ‘quiet encroachment of the ordinary’ –

‘the silent, protracted but pervasive advancement of the ordinary people on

the propertied, powerful, or the public in order to survive and improve their

lives’.148

Moving towards more overt and organised forms of agency and voice, many

accounts document the diverse forms of collective action and organisation

that informal actors have undertaken. Self-help organisations of the urban

poor have over time taken on rights-based agendas and advocacy functions.

Informal workers, from home workers to street vendors to transport

providers, have organised at varying levels: neighbourhood, city, national,

and even international.149

Finally, at the most assertive end of the spectrum, the urban poor and

marginalised are making claims that go beyond the ‘invited spaces of

144. 2017.

145. Meagher and Lindell 2013, quoting Cleaver et al. 2013.

146. 2010.

147. Lindell 2010.

148. Bayat 2004.

149. For a summary of related studies, see, for example, Hummel (2017).

U 4 I S S U E 2 0 2 0 : 6

33

citizenship’150 permitted and controlled by conventional governance. This

type of ‘insurgent citizenship’ or ‘urbanism from below’ includes the tested

tactics of strikes and civic disobedience, as well as more aggressive protest

forms such as occupations, sabotage, civil unrest, and guerrilla urbanism.151

All these forms of protest seek to shake up settled expectations about the

proper, the just, and the justifiable in urban environments.

These multiple types of agency and voice are often deployed simultaneously

or fluidly,152 leading Davis153 to describe informality as ‘a means of enacting

citizenship.’ The result is a rich tapestry of agency, but one that should not

be romanticised or overestimated. The challenges involved in confronting

entrenched political machines and economic extraction rackets are daunting,

and the risks of co-optation, internal corruption, and discriminatory pursuit

of self-interest are all too real.

150. Cornwall 2002.

151. Debord 2012; Sadler 1999; Finn 2014.

152. See, for example, the case study of claim making by market vendors in Kampala by

Lindell and Ampaire (2016).

153. 2018, p. 365.

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